Where Is Handle Going in 2015?

I started to write another prediction handle post, like I have other years. Interestingly, I went back and looked at my "Where is Handle Going in 2014" post, and realized...... I barely have to edit it. So, I have striked out a few things, and left it exactly where it is.

Horse racing is Bill Murray. It's groundhog day. It's its method of operation.

Anyhow here is my new post, with a few strike outs. Easiest post I've ever written.


Like we've seen over the past several years, the decrease in racedays causes handle to fall. A decrease in field size causes handle to fall. The other main driver of handle - the price, or takeout - has generally been falling, because rebating has not been a bad word like it was early in the decade.

What will happen in 2014 2015? Well, we are likely to see a further reduction in racedays. With slots revenue falling, as well as handle stagnating and foal crops receding, we aren't pulling out our pocket Kreskin to make that proclamation. Some tracks have finally concentrated on field size, like Keeneland *, and made it a go-to metric, but overall (see NYRA or So Cal), short fields continue to be something this business seems to crave and cling to. I can't see that going up either.

The last metric - takeout - is probably going to be a big determinant the next year or two**, and right now, this does not look pretty for customers who bet.

Lower takeout through modestly rebated handle is becoming extinct for the mid sized and smaller horseplayer. In New York and Pennsylvania***, many rebated players are being shuffled into high takeout regimes, and signal fees are being increased. Right now as I type, some tracks are withholding selling their signals to smaller ADW's who rebate, with the hope that players don't care about price and will continue to play in their systems. They won't. This will not happen.

As Mike Maloney noted in this interview: "All we’re doing when we raise takeout is driving away people. The regulars are coming less often or they’re coming just as often but getting ground down. People within the game still don’t understand how destructive takeout is." I think that's true and I we'll see this hurt handles in 2014.

So to sum up: If field size continues to fall, if racedays continue to fall, and if takeout is hiked as we've seen happen the last month, (along with making it harder and harder for players to conveniently bet the game by stifling choice via resellers, via higher signal fees****), it doesn't take a rocket scientist to predict handles will be lower in 2014 2015. If all three main determinants of handle growth are negative year over year, handle can't go anywhere but down, no matter how much racing insiders tell you otherwise.

* - The post was written before Keeneland went to dirt, and field size fell appreciably, as did handles.
** - The post was written well before the Chuchill takeout hike in April, where they suffered double digit decreases in handle.
*** - Many of these new rules are being instituted for the first time January 1st of this year.
**** - Signal fees have been under severe pressure for horseplayers and this has gotten worse with the conglomerates like Monarch, CDI/Troutnet/Tracknet etc. The environment for everyday customers started to get very bad in the summer of 14, and has gotten worse since then.

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